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With geopolitical tensions easing, traders are free to focus on earnings and China’s data dump Tuesday. And investors await the fallout from President Trump’s comments Monday on FX manipulation. Here are some of the things people in markets are talking about.
Investors Turn Attention to Earnings
U.S. stocks jumped as trade tensions and Syria turmoil faded, allowing investors to turn their attention toward first-quarter earnings. The dollar fell against most major peers to the lowest since March, while oil slide Oil slipped and Treasuries pared losses. "Earnings are going to be very good, probably up in the 15 to 20 percent neighborhood year over year. We felt that that would drive stocks higher over the course of the next two months," said Phil Orlando, chief equity market strategist at Federated Investors Inc.
Trump Defies Treasury on FX Manipulators
Donald Trump accused China and Russia of devaluing their currencies, breaking from his own administration’s view that no major trading partners are currency manipulators. Trump took to Twitter on Monday to declare that China and Russia are playing what he called a "currency devaluation game" at a time when the U.S. Federal Reserve is raising interest rates. "Not acceptable!," he wrote. His comments contradicted a Treasury Department semi-annual report on Friday that refrained from naming any country a currency manipulator based on specific criteria. Separately, China’s holdings of Treasuries rose by the most in six months, underscoring the attractiveness of U.S. assets even amid trade tensions between the world’s two largest economies.
ZTE Exports Curbed by U.S.
The U.S. blocked Chinese telecommunications-gear maker ZTE Corp. from exporting sensitive technology from America, alleging the company made false statements to U.S. officials. The Commerce Department determined ZTE made false statements to the Bureau of Industry and Security in 2016 and 2017 related to "senior employee disciplinary actions the company said it was taking or had already taken," according to a statement Monday. The department also said the company didn't disclose the fact it paid full bonuses to employees who engaged in illegal conduct.
Abe Heads to Mar-a-Lago
Embattled Japanese PM Shinzo Abe will drop in on Trump at Mar-a-Lago in Florida Tuesday to discuss the U.S. president's surprise decision to meet North Korean leader Kim Jong Un and levy tariffs on Japanese steel and aluminum exports. Abe's future has come under intense scrutiny amid a drip-feed of scandals that prompted a series of public apologies and drove his poll numbers to record lows.
Asia's traders will be focused Tuesday on China's GDP-headlined data dump. Consensus shows the region's biggest economy may report first quarter year-on-year growth of 6.8 percent, the same as in the fourth quarter. But it could come in weaker -- only five of 42 economists surveyed by Bloomberg forecast an acceleration. China is also expected to report that March retail sales and industrial output strengthened. Elsewhere, the RBA will release minutes from this month's meeting when it again held rates at a record low.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Trump loses his initial bid to review Cohen records seized by the FBI.
- China may be headed for some property defaults.
- Here are the takeaways from U.S. bank earnings so far.
- Aussie companies brush off China tensions.
- SoftBank is treating its bondholders like dirt… again.
- Modi is in the hot seat after violent crimes fuel backlash.
- These golf carts cost more than a Tesla or a Porsche.
- Travel agents reveal their favorite under-the-radar vacation spots.
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